The Monterey Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model...
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The Monterey Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2021 are 90,000 units. Monterey's target ending inventory is 9,000 units, and its beginning inventory is 7,000 units. The company's budgeted selling price to its distributors and dealers is 3,800 pesos per bicycle. Monterey buys all its wheels from an outside supplier. No defective wheels are accepted. A separate division of the company orders the extra wheels Monterey needs for replacement parts. The company's target ending inventory is 18,000 wheels, and its beginning inventory is 14,000 wheels. The budgeted purchase price is 300 pesos per wheel. Read the requirements. Requirement 1. Compute the budgeted revenues in pesos. Budgeted units Budgeted selling Total budgeted price per unit revenues Model XG Requirement 2. Compute the number of bicycles that Monterey should produce. Budgeted sales in units Add target ending finished goods inventory Total required units Deduct beginning finished goods inventory Units of finished goods to be produced Requirement 3. Compute the budgeted purchases of wheels in units and in pesos. Direct materials to be used in production - number of wheels Add target ending inventory -number of wheels Total requirement - number of wheels Deduct beginning inventory - number of wheels Purchases to be made - number of wheels Cost per wheel in pesos Purchases cost in pesos Requirement 4. What actions can Monterey's managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG? (Select all that apply.) The Monterey Co. in Mexico has a division that manufactures bicycles. Its budgeted sales for Model XG in 2021 are 90,000 units. Monterey's target ending inventory is 9,000 units, and its beginning inventory is 7,000 units. The company's budgeted selling price to its distributors and dealers is 3,800 pesos per bicycle. Monterey buys all its wheels from an outside supplier. No defective wheels are accepted. A separate division of the company orders the extra wheels Monterey needs for replacement parts. The company's target ending inventory is 18,000 wheels, and its beginning inventory is 14,000 wheels. The budgeted purchase price is 300 pesos per wheel. Read the requirements. Requirement 1. Compute the budgeted revenues in pesos. Budgeted units Budgeted selling Total budgeted price per unit revenues Model XG Requirement 2. Compute the number of bicycles that Monterey should produce. Budgeted sales in units Add target ending finished goods inventory Total required units Deduct beginning finished goods inventory Units of finished goods to be produced Requirement 3. Compute the budgeted purchases of wheels in units and in pesos. Direct materials to be used in production - number of wheels Add target ending inventory -number of wheels Total requirement - number of wheels Deduct beginning inventory - number of wheels Purchases to be made - number of wheels Cost per wheel in pesos Purchases cost in pesos Requirement 4. What actions can Monterey's managers take to reduce budgeted purchasing costs of wheels assuming the same budgeted sales for Model XG? (Select all that apply.)
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Horngrens Cost Accounting A Managerial Emphasis
ISBN: 978-0134475585
16th edition
Authors: Srikant M. Datar, Madhav V. Rajan
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